Having fun while interacting with your retailer is now the norm. But, there is one sector which has been decidedly sluggish in embracing what’s known as gamification. The financial sector has been slow to use games to engage and embrace their customers, yet change is on the horizon. But why has the financial sector been one step behind in one of the most exciting marketing developments for decades, and what does the future hold?
User interaction is the holy grail for companies who wish to get the maximum uplift from their customers. The idea of gamification is simple: people respond well to problem-solving, competition and reward. Add in social connection and you have triggered the most powerful forces of human nature.
Retailers have led the way, helped by the penetration of social media platforms into people’s psyches. However, banks and other financial institutions, which have huge numbers of customers who would readily embrace more ‘face-time,’ have been slow to join the party. What’s more interesting is that banks inside the US appear more reluctant to sing the praises of gamification than those outside its borders.
"With games being able to tap into such behaviors, I think it is imperative for banks to capitalize on them. Using games, banks can make the most of customer behavior to deliver marketing and sales messages. Banks can use gamification to continuously engage customers, by giving those customers regular fresh challenges to complete. Customers in return will reveal more of their preferences and needs and provide a wealth of data. Through the use of analytics, that data can assist in identifying and accurately targeting customer groups with different product and service offerings," explains Anas Bourani, Digital Channels Architecture Lead at Misys, a major player in the financial software industry.
The reasons behind this late start are complex, but the finger of blame could be pointed at the fact that banks are not natural digital gamers. It is not part of their DNA. For banking institutions, IT is not about having a good time, but about data processing and security.
One banking sector expert believes that banks are extremely cautious, almost untrusting of developing a digital interaction with their customers, citing the example of how banks treat the world’s largest social media platform, Facebook. For banks, Facebook is just another channel which allows them to push information out to their customers. They have been slow to realize that it is a perfect way to engage with their customer. They see it as a one-way street, rather than a two-way route.
Outside of the US, banks have been better at seeing the opportunities. They were quicker to realize that social media is a powerful tool and a portal into many of their customers' homes. Indeed, many banks in Europe are continually out-doing each other to hail engagement on a digital level as the main way to future riches.
Banks may not see the value of using gamified systems in banking – many are still grappling with ‘big data’ and don’t see the value of gamification as a means to even bigger data. The data collected from these gamified systems can create a number of practical and actionable insights for banks. With more customers using the systems, banks are able to identify and quantify customer needs, finding cross-product opportunities as well as recognizing prospects to cross and upsell different products. Gamified systems also allow banks to uncover successful sales channels and leverage up-and-coming channels where sales haven’t occurred on a systematic basis but have the potential to grow if the channel is systematized by the bank.
One non-US bank which has won plaudits for its approach to gamification is BBVA. This Spanish bank was quick to seize on gamification and made a splash with its digital BBVA game. This gave customers points for going onto the bank’s website. Within a short time, the bank noticed that customers were spending more time on their site and were enjoying the experience far more. The figures appear to support this: the bank claims to have quickly added 75,000 more users following the launch of its game.
Alex Bray, Retail Channels Director at Misys, believes that banks are now seeing the light when it comes to gamification: "Banks now have to find new ways to be relevant, engage customers and improve sales. Gamification and social media have changed the way people engage and expect to engage with their friends so it’s only natural that this would transfer to their employers and service providers.”
Banks are also realizing that if they intend to focus on customer engagement, then gamification is the only logical route to take. There are very few concepts out there which can so dramatically improve the customer experience and so drive engagement.
So what of the future?
Competition is the key. By adding an element of competition among users, banks can not only increase engagement figures, but get the customers to take certain courses of action. One game in development will give rewards for customers who make larger deposits in their savings accounts. In this way, the idea of gamification transcends user engagement and is actually a tool for good.
But the banks have to move quickly to keep up. They might just be getting comfortable with gamification, but they have to follow the examples of others in the sector which sees the concept not just being offered to the tech savvy younger generation, but also the older members of society. The “silver surfers” need to be engaged as well.
They also have to appreciate that as users become more used to gamification, then the demands for better quality games will increase, both in terms of design and game play sophistication. Gamification now has its foot through the banking door, but the financial institutions need to ensure that they do not get left behind. The train left the station some while ago and it is not slowing down.
Carlo Pandian is a guest writer for SIGMA’s Insights in Bytes. He is interested in innovative marketing techniques, international finance and technology. Connect with him on Twitter, @carlopandian.